Friday, December 30, 2011

Bank of America Settles Huge Fair-Lending Lawsuit For Discriminating Against Minority Borrowers

Illinois and federal officials recently announced that Bank of America must pay $335 million to settle allegations that its Countrywide Financial unit discriminated against minority borrowers during the housing boom.  According to the Chicago Tribune, Countrywide allegedly steered African-American and Hispanic borrowers into high-risk subprime loans and charged them higher interest rates and fees on mortgages.

This news comes as a sad but not unsurprising development.  Our Oak Park foreclosure defense attorneys know that many instances of mortgage fraud and abuse occurred before and after the housing bubble burst.  If you or someone you know is in danger of mortgage foreclosure, it may be worth examining your options and understanding the ways in which unscrupulous lenders have taken advantage of troubled homeowners in the past. 

Bank of America’s agreement is the largest residential fair-lending settlement in history, reports the New York Times.  However, a federal judge in California first must approve the settlement.  The now-defunct Countrywide was originally based in California before Bank of America purchased its assets.  The allegations stem from actions the company took between 2004 and 2008, before Bank of America bought it. 

Countrywide’s lending problems evolved out of a company policy granting loan officers and brokers the discretion to alter the terms for which a particular applicant qualified.  However, Countrywide failed to develop any system that ensured their loan officers were complying with fair-lending rules.  Federal civil rights laws prohibit lending practices that have a disparate impact on minority borrowers.  Here, Countrywide charged Hispanics and African-Americans more, on average, than white applicants with similar credit histories.

On the federal level, the Department of Justice increasingly has investigated instances of illegal lending practices due to the housing crisis and the revelation of suspected fraudulent or discriminatory behavior.  In 2010, the Department formed a unit focusing exclusively on banks and mortgage brokers suspected of discriminating against minority mortgage applicants. 

Closer to home Attorney General Lisa Madigan has also investigated fraudulent Illinois lending practices.  In June 2010, AG Madigan filed a lawsuit against Countrywide Financial Corp., Countrywide Home Loans Inc., and Full Spectrum Lending Inc., a branch of Countrywide that primarily sold subprime loans.  The suit alleged that Countrywide violated the Illinois Fairness in Lending Act and the Illinois Human Rights Act.  The Illinois Fairness in Lending Act states that no financial institution may “[d]eny or vary the terms of a loan on the basis of the borrower’s race . . . or national origin.”  815 ILCS 120/3.  By analyzing Countrywide’s lending data, AG Madigan was able to determine that minority borrowers paid more for mortgages than white borrowers.  They also were sold high-risk (i.e. subprime) loans even when they qualified for low-cost (i.e. prime) loans.

In today’s economy, the Oak Park mortgage foreclosure lawyers at the Emerson Firm know that people of all income levels may find themselves struggling.  We understand that clients appreciate lawyers who care about them, as well as about the outcome of their case.  If you believe you were a victim of lending discrimination, or if you have questions about whether defending your mortgage foreclosure or choosing bankruptcy is right for you and your family, please contact the Emerson Firm at 708-660-9190 or visit us online today.

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Friday, December 23, 2011

Continuing Losses for Mortgage Giant Freddie Mac

Our Oak Park foreclosure attorneys know that the foreclosure crisis in America is continuing to this day.  We all hope that the housing market is on its way back up after a rough few years, but it seems there is still a long way to go before the market is healthy again.

Last month, government-sponsored mortgage giant Freddie Mac (the second largest mortgage lender in the US) asked the US Treasury for another $6 billion dollars after posting its worst quarterly loss in over a year.  That brings the total Freddie Mac taxpayer bailout to $72.2 billion, although it has returned $14.9 billion in dividends.  While in the last quarter the organization received a net interest income of $4.6 billion, it lost $4.8 billion in derivatives alone and another $3.6 billion in credit losses.  Freddie Mac’s CEO Charles Haldeman stated that a lot of these losses are due to hundreds of thousands of borrowers refinancing in the third quarter, which was a great step for borrowers and will help those struggling to make their mortgage payments.  But it also means more losses and less income for Freddie Mac.  And the losses are likely to continue with a revamping of the Home Affordable Refinance Program (HARP).  HARP is expected to allow up to one million more homeowners with Freddie Mac and Fannie Mae loans to refinance at today’s incredibly low interest rates.  To be eligible, the mortgage must have been sold to Freddie Mac or Fannie Mae before May 31, 2009.  There are additional conditions to these loans to make sure they are targeting responsible homeowners, such as you must be current on your mortgage with a good payment history for the last 12 months and the current loan-to-value ratio must be greater than 80 percent.  This type of loan adjustment is often the only viable option for borrowers with low credit scores or little equity left in their homes.

Despite the financial losses, Freddie Mac claims to have helped 48,000 borrowers avoid foreclosure in the third quarter, utilizing things such as loan modifications and repayment plans.  But the mortgage giant’s real estate owned (REO) costs from foreclosed properties skyrocketed, consisting of such expenses as maintaining the foreclosed properties and recoveries from mortgage insurance, which also hurt their bottom line.

Emerson Firm attorneys are experienced at helping clients defend against foreclosure actions.  Our Illinois foreclosure defense attorneys can help you understand the many options that exist out there specifically to help hardworking people keep their homes.  Our attorneys can also explain options to refinance to make it easier for you to keep up to date on your mortgage, like the HARP program discussed above.  We can help you determine the best cause of action and to navigate the regulations to give you the best chance to find a solution for you and your family.

In the spirit of the season, all the Oak Park foreclosure lawyers at the Emerson Law Firm want to wish our clients and friends in the Chicago area Happy Holidays!

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Thursday, December 22, 2011

City Ordinances Hold Mortgagees Responsible For Foreclosed Vacant Properties

Although the number of foreclosures have dropped in the Chicago area and nationally, many homes still sit vacant.  Our Oak Park foreclosure defense attorneys know that vacant properties, especially if not properly cared for, can cause a host of problems for Chicagoland residents.  Abandoned homes typically affect the value of the houses of neighbors, making it extremely hard to sell in an already challenged housing market.

The growing number of abandoned and dilapidated properties has made many Illinois cities eager to enter into agreements that will require owners of vacant buildings to take responsibility for them.  According to the Chicago Tribune, as of September 2010, there were 1,900 vacant properties within the city of Chicago alone where foreclosure proceedings had been launched by mortgage servicers but were never completed, which left the properties in limbo and likely not secured or maintained.  Approximately 10% of residential buildings in Cook County are vacant.

Last week, the Cook County Board passed a vacant building ordinance that is similar to the one the city of Chicago previously adopted.  The Chicago Tribune reports that the county’s measure, which passed without opposition, requires a property’s mortgagee to pay $250 to list buildings as vacant on a countywide registry.  The ordinance will take effect in mid-February and will apply to all areas of unincorporated Cook County.

The Cook County ordinance mandates that owners of vacant properties register those parcels and take responsibility for them within 30 days of the buildings becoming vacant or after assuming ownership of the buildings.  Mortgagees must do so within 60 days after a mortgage default.  Thus, mortgagees are now responsible for the maintenance of vacant properties within a reasonable timeframe so the properties do not fall into such drastic disrepair.  The ordinance will not apply to buildings that are vacant but being cared for, under construction or rehab, the subject of a probate action, or in an ownership dispute.

According to Commissioner Bridget Gainer, D-Chicago, 75% of the mortgages in Cook County are owned by the Federal Housing Finance Agency (FHFA).  Gainer claims this allows the owners of vacant properties to ignore their responsibilities to their own assets and to Illinois communities.

Despite apparent support for such laws, Chicago’s ordinance, which is similar to Cook County’s but requires a $500 property registration fee, has become the subject of a federal lawsuit.  The FHFA, which oversees Fannie Mae and Freddie Mac, filed a lawsuit against the city, alleging that the ordinance infringes on its role as the sole regulator and supervisor of Fannie and Freddie.  The two big-time mortgage financiers own about 258,000 mortgages within the city of Chicago.  In recent years, the lending giants have been accused of failing to detect and prevent fraudulent mortgage foreclosure practices

The federal lawsuit seeks to exempt all of the FHFA’s mortgages from the ordinance.  Chicago officials say they plan to vigorously defend the ordinance in court.

The Chicago foreclosure lawyers at the Emerson Firm can help you decide if foreclosure is the best possible option for you and your family.  Helping you comply with the law and protecting your assets is our top priority.  Illinois foreclosure law is changing all the time, so it is essential for Oak Park residents to be aware of the resources available to them.  Please consider contacting the Emerson Law Firm for a foreclosure defense consultation today. 

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Friday, December 16, 2011

Illinois Debtors Should Ensure That Bankruptcy Petitions Are Prepared Legally

Our Oak Park bankruptcy lawyers know that filing for bankruptcy has become a reality for many Chicagoland residents who decide it is necessary as a last resort.  Bankruptcy is a legal procedure for dealing with consumer and/or business debt and is typically a one-time event for most people.  If you are not familiar with the process, it can sometimes seem overwhelming.  Many debtors worry that their situation is hopeless, but, thankfully, that is not true. 

If you are considering filing for bankruptcy, one of the most important things is to make sure you are completing all of your paperwork legally and above-board.  For example, as Delmarva Now News reports, someone who is not a lawyer (or who does not work for a lawyer) who prepares bankruptcy petitions for a fee and does not sign the petitions is violating federal law.  A bankruptcy petition is the official document that a debtor or creditor files to start a bankruptcy case.  It is legal for a non-lawyer to prepare bankruptcy petitions for a fee.  However, those preparers must sign the petition as well as other documents that must accompany the petition.  Bankruptcy petition preparers must also make significant written disclosures to the debtors they assist and provide those debtors with a written contract.  All of these requirements are essential to making sure your bankruptcy documents are prepared in accordance with Illinois bankruptcy law.

On the other hand, bankruptcy petition preparers who are not lawyers may not provide legal advice.  Changes to U.S. bankruptcy law frequently occur, so you should seriously consider consulting a legal professional to help you with your case.  A professional well versed in Illinois bankruptcy law can help assist you in answering many of the important questions you are sure to have if you are considering filing for bankruptcy.  For example, you might wonder what assets, if any, you can keep after filing for bankruptcy.  You may also be unsure whether you should even file for bankruptcy or may need to know what type of bankruptcy to file. 

While it can be tempting to cut corners, doing so could have serious, long-term consequences for you, your business, or your family.  If a problem arises with your bankruptcy petition, and you did not seek the help of a bankruptcy lawyer a debtor could be on his or her own.  This is because a bankruptcy petition preparer cannot represent a debtor, even at a creditors meeting.  If the petition is not prepared properly, it can result in the debtor’s case being dismissed or in a delay in the proceedings.  Debtors may also have to repay filing fees, which can add up if you are concerned about finances.

Our Oak Park bankruptcy attorneys work with clients to best meet their needs.  We realize that financial troubles can often seem overwhelming and that it can be difficult to admit you need help.  In these tough economic times, our lawyers will do everything they can to help you consider all of your options.  For a confidential bankruptcy consultation with the Emerson Law Firm, please call our office at 708-660-9190 or visit us online.

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Friday, December 9, 2011

Illinois Foreclosure Defense Lawyers Understand Current State of Chicago Housing Market

Our Oak Park foreclosure defense attorneys have closely monitored the housing market troubles since the beginning and watched with concern when the housing bubble burst in 2008.  We realize that it is vital for lawyers to understand the various factors that continue to affect the housing market.
Recently, the National Association of Realtors stated that U.S. home prices fell in three-quarters of all metropolitan areas in the third quarter of 2011. reports that the median price of homes in the U.S. was down 4.7% in the third quarter of 2011, compared to the same period in 2010. 

According to an article in Medill Reports, Illinois third-quarter home sales are up 19.9% from a year ago.  Illinois is one of the top five states that accounted for more than half of the nation’s total foreclosure activity in 2010.  In Illinois, mortgage loan applications also have surged, boosted by low interest rates, which have fueled a refinancing demand.  A homeowner might choose to refinance for a number of reasons, including to take advantage of a lower interest rate or to reduce a monthly repayment amount.

The Chicago Tribune recently reported that fewer homeowners are defaulting on their mortgages, which is a positive sign, but that foreclosures are expected to increase.  Many economists have suggested it will take years to return to a typical pattern of delinquencies and foreclosures.  For example, Guy Cecala, publisher of Inside Mortgage Finance, believes it will take at least two more years to resolve the crisis.  The pace of improvement is dependent upon how fast banks can clear out defaulted mortgages and foreclosed properties, said Mr. Cecala.

It is good news that many homeowners are currently able to keep up with their mortgage payments.  It could be a sign that the economy is improving.  Low housing prices also could encourage hesitant or first-time buyers, especially as the economy slowly starts to improve.

However, the massive backlog of foreclosed homes has meant that the housing market has been improving sluggishly, if at all.  That backlog has remained high in part due to alleged robo-signing.  Lenders halted or slowed foreclosure proceedings for much of 2011 when it was revealed in 2010 that mishandled or fraudulent paperwork had been filed in many cases.  Fraudulent mortgage foreclosure practices, such as alleged robo-signing, were a huge setback in the housing crisis.

Lingering unemployment—currently at approximately 9% nationally—also has thwarted improvements in the housing market.  Despite low housing prices, many prospective buyers may be reluctant to commit to a mortgage when the future remains uncertain.  Thus, even though it is a buyer’s market and sellers are struggling, concern regarding economic uncertainty may be discouraging those looking to make new investments.

You can be confident that the lawyers at the Emerson Firm are up to date on Chicago foreclosure law and understand the various fluctuations in the housing market.  If you are concerned that you may lose your home in a foreclosure action and you live in the Chicago area, you are not alone because there are many legal options available to you.  Our Chicago foreclosure defense lawyers work with homeowners to best meet their needs, including defending them in foreclosure suits or by helping them use loss mitigation strategies where appropriate, such as loan modification or bankruptcy.  Illinois foreclosure law is changing all the time, so it is essential for Chicagoland residents to be aware of all the resources available to them.  Please consider contacting the Emerson Law Firm for a consultation today. 

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Wednesday, December 7, 2011

Improper Bank Foreclosures Create Trail of Victims

Our Oak Park foreclosure defense attorneys know how difficult it is for a homeowner to go through foreclosure proceedings and potentially lose their home.  But what if you bought a house in what you thought was a fair and legal transaction, and kept up with all of your payments, but found out that you will still lose your house?  Not because anything you did, but because the bank previously foreclosed on a house improperly and therefore did not have the title to sell to you.  The bank’s shoddy foreclosure practices not only hurt the homeowners who lost their house but also the innocent third party who bought the house.

This was at issue in a recent judgment by the Massachusetts Supreme Judicial Court in Bevilacqua v. Rodriguez.  Mr. Bevilacqua bought a property in a foreclosure sale by US Bank.  He invested several hundred thousand dollars in the property and turned it into condominiums, a few of which he had reportedly already sold.  However, unbeknownst to him, US Bank had messed up the foreclosure.  The previous foreclosure was void under a 2010 case, U.S. Bank v. Ibanez, which found that if a bank cannot provide proof it owns the mortgage, any foreclosure actions are invalid.  The Bevilacqua case extends that ruling further and finds that the innocent third party who bought the foreclosed property from the bank never had a proper title and therefore cannot own it.  In this case the previous owner, Mr. Rodriguez, was nowhere to be found, but that did not change the fact that Mr. Bevilacqua never owned the property in question.  The only practical remedy to someone like Mr. Bevilacqua who had invested so much money in a property was to go through a re-foreclosure, which could be very costly and have consequences if Mr. Rodriguez showed up as the legal owner or if other parties were interested in bidding on the property.

Massachusetts Attorney General Martha Coakley stated that this is endemic of a wider problem with bad foreclosure practices.  She said that the banks’ reckless behavior in foreclosure proceedings has harmed both homeowners and third party buyers.  Bevilacqua, however, does not address the robo-signing controversy (see previous post here.  That issue is still waiting for judicial consideration in Massachusetts, as in Illinois. 

As Oak Park foreclosure defense lawyers, we certainly know that banks’ actions in foreclosure proceedings are not always above board.  The continuing foreclosure crisis has made these hasty and often slapdash actions to take peoples’ homes even more apparent.  And the more links added to the ineffective title chain from an improper foreclosure makes the situation harmful to more people and potentially more difficult to untangle.  If you believe your house has been improperly foreclosed or the bank is taking inappropriate actions, please contact an experienced foreclosure attorney in your area.  As these Massachusetts cases show, there is legal recourse against banks’ incorrect actions and if the bank does not have proof it holds the mortgage to the house, there are remedies for homeowners.  Additionally, if you are concerned about buying or having previously bought a foreclosed property, a Chicago foreclosure attorney can check out your title and see if there are any issues or potential problems.

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Friday, December 2, 2011

Oak Park Bankruptcy Lawyers Share Data About Increased Pro Se Filings

Our Chicago bankruptcy lawyers have learned that the Administrative Office of the U.S. Courts recently released a report outlining a troubling phenomenon in bankruptcy filings.  Over the past five years, according to the report, the growth of pro se bankruptcy filings has outpaced the rate of growth of overall bankruptcy filings.  This revelation is disturbing because it suggests that some of the nation’s most financially vulnerable citizens believe they must go it alone rather than hiring an attorney when facing bankruptcy. 

Pro se legal representation means that a person is representing himself or herself without legal counsel in a court proceeding.  A person may choose to represent himself or herself for many reasons, but, typically, it is because the person believes he or she does not need or cannot afford an attorney.  However, this often is not the case.  It is almost always worth considering hiring an attorney because it can mean a big difference in the outcome of your case.  

Over the past five years, non-pro se bankruptcy petitions increased 98%, but pro se bankruptcy petitions grew 187% over the same time period.  Pro se chapter 7 filings also rose 208%, and pro se chapter 13 filings increased 189%.  Chapter 7 bankruptcy is a process of debt liquidation under which debtors may consolidate student loans, protect loan co-signers, or eliminate credit card debt.  Chapter 13 bankruptcy is a process of debt restructuring that allows debtors to reorganize their debt under the supervision of a federal bankruptcy court.  Chapter 7 and chapter 13 filings make up the vast majority of overall bankruptcy filings.

The report found that the number of pro se petitions did not occur uniformly throughout the country.  For example, such filings increased most rapidly in the western part of the United States.  Illinois was not one of the top areas in which pro se bankruptcy filings increased.  Although the Northern District of Illinois had the second most filings in 2011 (with 63,440 filings), it ranked 39th for pro se filings.

One legal scholar has suggested that the adoption of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) in 2005 may have influenced the dramatic increase in pro se filings. The BAPCPA made several significant changes to the U.S. bankruptcy law.  For one thing, the BAPCPA made it more difficult for some consumers to file bankruptcy under chapter 7.  Thus, those consumers likely must file under chapter 13 instead.  This can have serious implications because under chapter 7 most debts are forgiven (or discharged), but under chapter 13, debts are discharged only after the debtor has repaid some portion of those debts.

The rapid increase of pro se bankruptcy filings suggests that debtors are struggling and that their legal rights may be negatively impacted.  For example, in a post on LexisNexis’ Bankruptcy Law Blog, this scholar noted that pro se filings are much less likely to succeed than filings by represented debtors. The post cited data presented at the National Conference of Bankruptcy Judges, which showed that nearly 90% of pro se chapter 13 debtors had their cases dismissed prior to confirmation of a plan and only 4% still had a case pending after four years.  A 2007 sample showed that 17.6% of pro se chapter 7 debtors had their cases dismissed for technical problems as compared to only 1.9% of represented debtors.

Such data is extremely concerning because meritorious claims may be dismissed due to technical issues.  Chicagoland bankruptcy attorneys know this is more likely to happen when debtors are not represented by legal counsel. 

The Oak Park bankruptcy lawyers at the Emerson Law Firm understand that financial troubles can often seem overwhelming and that it can be difficult to admit that you need help.  In these hard economic times, our attorneys will do everything they can to help you consider all of your options.

You can read the Administrative Office of the U.S. Courts’ full report here.  For a confidential bankruptcy consultation, please visit the Emerson Law Firm online or call 708-660-9190.

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Friday, November 25, 2011

Alleged Robo-Signers Indicted for Forging Mortgage Foreclosure Documents

Our Oak Park foreclosure defense attorneys understand the problem of robo-signed mortgages.  We have monitored the robo-signing scandal from the beginning because we know that thousands of Chicagoland residents were taken advantage of when lenders engaged in fraudulent lending practices.  Robo-signing likely has been the cause of thousands of wrongful foreclosures across the nation in recent years.  Finally, some of the people who jeopardized the homes and futures of thousands of Americans are being brought to justice. 
The Boston Globe and CNN Money report that two title officers in Nevada were indicted on more than 600 charges.  The prosecution alleges that the two officers directed a massive “robo-signing” scheme, which led to the filing of tens of thousands of fraudulent foreclosure documents. 

According to the indictment, between 2005 and 2008, the two officers allegedly directed employees to forge their names on foreclosure documents and then notarize the signatures they had just forged.  The officers then had their employees file the fraudulent notices of default with the county recorder’s office, which started foreclosure proceedings.  The officers, who worked for a mortgage servicing firm called Lending Processing Services, face both felony and misdemeanor charges.  Attorneys in California and Illinois have also subpoenaed Lending Processing Services in connection with their alleged robo-signing practices.  According to the Illinois Attorney General’s Office, Lender Processing Services processes loans for more than 50% of all U.S. mortgages. 

Unfortunately, such blatant fraudulent mortgage foreclosure practices have occurred nationwide, not only in Nevada.  Courts in a number of states have dismissed many cases in which it appeared that foreclosure documents had been falsified.  Some of the country’s largest banks as well as other lenders temporarily halted foreclosure proceedings across the nation.

According to Nevada’s Attorney General, this indictment may be the first time that criminal charges have been filed in connection with robo-signing.  The Illinois mortgage foreclosure lawyers at the Emerson Firm are encouraged that states are beginning to take action against those who are responsible for harming so many homeowners.  Indictments could be filed in Illinois if the state determines there is enough evidence to charge Lending Processing Services or other lending companies allegedly involved in falsifying mortgage foreclosure documents.

Shortly after the indictment was handed down, Lending Processing Services issued a statement, which acknowledged that the signing procedures on some of its foreclosure documents were “flawed.”  However, the mortgage servicing company also stated that its mortgage documents were “properly authorized” and did not result in any wrongful foreclosures.

If you are afraid you may lose your home or believe you have been a victim of fraudulent behavior, please contact a qualified legal professional as soon as possible.  For example, Illinois foreclosure law may afford you important protections, but some of those protections may become time-barred if you wait too long to contact an attorney.  The foreclosure attorneys at the Emerson Firm know that your home is an investment worth protecting.  At the Emerson Law Firm, you can feel confident that our foreclosure defense lawyers are on your side.

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Thursday, November 17, 2011

Scammers Use Mortgage Foreclosure Rescue Schemes to Defraud Chicagoland Homeowners

According to a recent report in MarketWatch, scammers are employing new tactics to target vulnerable homeowners looking for a way to save their homes from Chicago mortgage foreclosure.  As the article explains, fraudsters have always been around, but in recent years, they have employed strategies specifically designed to take advantage of the housing market’s downturn.

Many of the schemes are crimes of opportunity, and years into the foreclosure crisis, there are many such opportunities because there are still scores of distressed homeowners hoping to find a way to keep their heads above water. 

The most troubling tactic is any one of a number of mortgage foreclosure rescue schemes, which target struggling homeowners headed toward foreclosure.  Yolanda McGill, senior counsel for the Fair Housing and Fair Lending Project of the Lawyers’ Committee for Civil Rights Under Law, reports that scammers use various pitches to lure homeowners.  Some scammers say they can help prepare documents for homeowners trying to obtain a loan modification.  Others claim to be an attorney or say they are working with an attorney.  The offers can appear legitimate because the scammers use tactics to gain the trust of homeowners.  For example, they often mimic some of the same language used by government programs and lenders.  These scammers offer fake services, take the money of unsuspecting homeowners, and then simply disappear.

McGill warns that homeowners should never pay up-front fees for non legal services—that is, money before the services are rendered—because the Mortgage Assistance Relief Services Rule, which became effective last January, prohibits them.  There is an exception for attorney fees.  Unfortunately, some scammers are aware of this exception and pose as representatives of an attorney’s office in order to dupe homeowners.  Another tactic scammers frequently use is convincing homeowners to sign a quit-claim deed.  The quit-claim deed transfers ownership of the home to the scammer, who promises the homeowner a situation where he or she will be able to remain in the house.  Still other scammers have approached individuals who have already lost their homes.  The scammers solicit money from these individuals, claiming that the homeowners can pay money to get their homes back.

Our Chicago mortgage foreclosure defense lawyers know that if an offer sounds too good to be true, it probably is.  Over the years, we have witnessed the ups and downs of the housing market, as well as learned about a number of fraudulent mortgage foreclosure practicesIf you are a struggling homeowner, things likely are not as hopeless as they seem.  There are many ways to legitimately refinance your home, obtain a loan modification, or avoid foreclosure.   If you are afraid you may lose your home or believe you have been a victim of fraudulent behavior, please contact a qualified professional as soon as possible.  For example, Illinois foreclosure law may afford you important protections, but some of those protections may become time-barred if you wait too long to contact an attorney.  Our Oak Park mortgage foreclosure attorneys have successfully represented many Chicago homeowners and know how to best defend your rights.

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Friday, November 11, 2011

A HARP Overhaul – An End to the Chicagoland Housing Crisis?

Unfortunately, the number of foreclosure filings during the month of October increased 9 percent from September  in the Chicago area, as reported by the Chicago Tribune.  Although, the number of national foreclosure filings are less when compared to this time a year ago, our Oak Park foreclosure defense lawyer knows that this increase is suggesting that bank foreclosure action is on the rise again. It was during this time in 2010 when  U.S. banks delayed or ceased foreclosure proceedings against homeowners after  practices of  illegal or questionable paperwork  were revealed, also known as the robo- signing scandals.  Arguably, the current nationwide and Chicagoland housing crisis is a continuation of the housing buble and subprime mortgage calamities which began in 2006 and 2007 and a collapsing  domestic economy which has contributed to the current 9.4 percent Chicagoarea unemployment rate. But, for some local homeowners who are at risk of facing a Chicago home foreclosure , federal assistance is on its way to help them remain in their homes. 

On October 24th,  the Obama Administration announced a major overhaul to the Home Affordable Refinance Program (HARP). As many of you may recall,  in 2009, HARP was created under the current admnistration as an effort to help American homeonwners that have loans owned or guranteed by Fannie Mae or Freddie Mac and are current on their existing mortgages, but are “underwater”.  Underwater is the term used to define when a homeowner’s mortgage is more than the current market value on their property.

Initially, the administration expected to help 4 -5 million struggling American homeowners who faced  residential home foreclosures. However, according to a recent’s article, approximately 1 million American homeowners have taken advantage of the program.  With the new revisions, another 1 million will be able to cash in on the elimination of specific HARP requirements, such as the 125 percent loan-to-value (LTV) condition.

The revamping of HARP maybe a step in the right directon to help stabilize our nation’s and local housing markets, and  help some Chicago area residents with saving their most valuable investment.  Regrettably, not all of the our community’s cash strapped homeowners who are at risk of losing their homes will be able to take advantage of the HARP’s refinancing elements. And as a result, in the alternative, some meet with a Chicago bankruptcy attorney and choose to file for Chapter 13  bankruptcy protection  in order to save their homes.

Filling for bankruptcy protection should be used as a last resort. If you are current on your existing mortgage which is owned or guranteed by Fannie Mae or Freddie Mac that was sold to one of the Government Sponsored Enterprises (GSE) on or before May 31, 2009, and you owe between 80 – 125% of the home value  and never refinanced under the provisions of HARP; and you have the financial means to pay your mortgage, then perhaps you should consider taking advantage of the program’s  low-interest refinancing benefits to modify your home loan.

Our Oak Park foreclosure defense attorneys at our Emerson Law Firm have many years of experience assisting Chicago area residents during their economic and financial crises. We understand that sometimes bad things happen to good people and the majority of the American people want to pay off their creditors. But, during this turbulent time of  national and global economic uncertainties  with increasing layoffs, high rates of unemployment and recent elevations in gas and food prices, many hard working individuals are unable to pay their bills. If you feeling stressed, overwhelmed, received a foreclosure notice or think that you cannot afford or are eligible to file for bankruptcy protection, contact our Emerson Law Firm today to speak with one our skilled Oak Park bankruptcy attorneys who can advise you of your legal options.

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Foreclosure Defense Attorneys Understand the Problem of Robo-Signed Mortgages

Wednesday, November 9, 2011

Experts Report that the Key to Illinois Housing Recovery is Jobs

Last Friday, the Chicago Tribune reported that Illinois will be one of the last states to recover from the housing crisis.  This estimate is based on the National Association of Home Builders’ recent predictions.  Our Oak Park mortgage foreclosure attorneys know that many homeowners, as well as prospective homeowners, still have concerns about the housing market.  Many Illinois residents are concerned because their mortgages are underwater (i.e. the amount owed on the mortgage exceeds the value of the home) or because they simply cannot keep up with housing payments, which could put them in danger of facing Chicago mortgage foreclosure

According to the Chicago Tribune, the problem with the Chicago housing market is jobs.  Unlike other struggling states where overbuilding and “skyrocketing home values” led to the housing crisis, Illinois is still experiencing high levels of unemployment.  That means current homeowners likely are struggling to pay their mortgages.  It also means that prospective buyers are reluctant to purchase homes because they probably are concerned about job security and long-term financial stability.  Therefore, foreclosed homes are sitting vacant, which drives down property values.  Unfortunately, it is a situation that does not appear to be getting much better.

This September, Illinois’ unemployment rate rose to 10%, the highest level since August 2010.
The Chicago-Joliet-Naperville area experienced the biggest year-over-year increase in September with a jobless rate of 9.8%, up from 9.3% a year ago.  Chicago’s unemployment rate affects the housing market because, as experts explain, home construction growth in a particular state, as well as across the entire country, relies on the estimated 2 million households waiting to purchase homes when they believe the time is right.  Believing the time is right not only has a lot to do with feeling secure as an individual, but also with feeling confident in one’s larger economic environment.

There is some good news.  The National Association of Home Builders’ forecast revealed that the consumers who are buying are purchasing homes that are much more in line with their ability to afford them.  According to the news article, consumers typically qualify for and purchase homes that are three times their income.  That amount swelled to an unsustainable five times a consumer’s income during the bubble years.  Due to lower home values and tight credit underwriting, those numbers are back down to more realistic levels.

Of course, lower home prices do not necessarily help those who are currently struggling and might be facing foreclosure.  Unfortunately, many Chicago homeowners do not reach out for help, often because they feel overwhelmed or fear that their situation is hopeless.  Yet seeking assistance from a legal professional can help ease your worries and get you back on the track toward financial stability.  Homeowners should not give up because there are many foreclosure defense options available.  Illinois foreclosure law is changing all the time, so it is essential for Chicagoland residents to be aware of all of the resources available to them.  Please consider contacting the Chicago mortgage foreclosure lawyers at the Emerson Firm for a free consultation today. 

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Friday, November 4, 2011

Flaws Revealed in New Mortgage Foreclosure Complaint Procedure Indicate that Wronged Chicagoland Homeowners May Not Benefit Under the Plan

The Oak Park mortgage foreclosure defense attorneys at the Emerson Firm recently explained that federal regulators plan to unveil a new complaint procedure for homeowners victimized by our country’s flawed foreclosure process.  According to a report in the Chicago Tribune, the complaint procedure is the “first tangible action” toward addressing the many errors revealed last year made by banks during the foreclosure process.  Such mistakes were numerous and widespread, leading regulators, the legal profession, and Chicago-area homeowners to question the efficacy of some of the country’s largest mortgage lending companies.  Yet as more information has come to light about the new complaint procedure, several important flaws with the plan have been exposed.

The purpose of the new complaint procedure is to address a wide range of fraudulent mortgage foreclosure practices while also providing some monetary relief to aggrieved homeowners.  This week, mortgage servicers began mailing out letters to invite potentially aggrieved borrowers to submit their cases for a free review by independent consultants.  The lenders will fund the reviews.  If independent consultants find that a homeowner was financially harmed by fraudulent lending practices, that borrower may be eligible for compensation. 

But the new procedure already has some serious flaws.  Consumer advocates and others have criticized the federal regulators involved in the new plan, according to the Chicago Tribune
Our Chicago mortgage foreclosure lawyers also believe that the new complaint procedure has important flaws because the plan is limited in its scope and could result in some homeowners giving up their rights without knowing the consequences of doing so.  Some of the plan’s most concerning flaws include:

  • Limited scope:  Only people who were in foreclosure in 2009 and 2010 will receive letters from mortgage servicers.  Our attorneys at the Emerson Firm know that homeowners with valid claims may not be covered under the new procedure and could still benefit from speaking with a legal professional about the viability of their claims.
  • Too Much Influence from Banks and Lenders:  One law professor has expressed concern that federal regulators are more worried about the “‘banks’ bottom lines than whether banks follow all the rules.’”  If true, this could be a serious blow to consumers who have already suffered due to the actions of greedy banks and lending companies.
  • Lack of Definition and Transparency:  Most importantly, the new complaint procedure is still underdeveloped, even though mortgage servicers are already sending out letters asking borrowers to send in their claims.  Consumer advocates have criticized regulators for their lack of transparency, raising concerns that many eligible borrowers may not be reached.  Also, regulators have not released a system for determining how much to compensate homeowners whose homes were improperly foreclosed upon.  Therefore, it could be difficult for a homeowner to dispute whether he or she has been compensated fairly.  Finally, it is not clear whether borrowers will have to give up their rights to further claims under Illinois foreclosure law if they receive compensation under the complaint system.  This means that some borrowers could actually be undercompensated.

The new complaint procedure is an initial step toward getting wronged Chicagoland homeowners the compensation they deserve, but it may not be the best solution for all homeowners.  If you believe you were a victim of fraudulent mortgage foreclosure practices, please contact a qualified legal professional.  For a confidential consultation with a legal professional at the Emerson Law Firm, please call our office at 708-660-9190 or visit us online. 

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